For all those clients who had a strategy of contributing to superannuation the maximum amount allowed and then take a pension out of their super fund, the window of the benefits of this strategy is about to cease from 1 July 2017. From 1 July 2017 the Government has changed the tax exemption allowed on the investment earnings of this type of pension – no longer will the earnings be tax free but will be taxed in the same way as an accumulation member (15%). Therefore, people should be considering whether they can meet the appropriate conditions of release to change the pension to an account based pension, which keeps the tax exemptions, or should they roll back their transition to retirement pension back to accumulation phase. Each answer will be different for each client – no single rule fits, due to different circumstances and aims in life.

We suggest all clients who already have a transition to retirement pension in place contact either Matthew Grapsas, Simon Flowers or Cathy Walley to discuss your options going forward from 1 July 2017.

The Victorian Government has announced that stamp duty (land transfer duty) will be abolished for first-home buyers purchasing a home with a dutiable value of not more than $600,000. This will make the existing first-home buyer 50 per cent duty reduction that applies to the purchase of a home with a dutiable value of not more than $600,000 a full exemption. Further, duty will be phased-in for eligible first-home buyers who purchase a home with a dutiable value between $600,001 and $750,000. The new measures will apply for contracts entered into from 1 July 2017.

The Victorian Government has announced that it intends to increase the First Home Owner Grant (FHOG) from $10,000 to $20,000 for new homes built in regional Victoria and valued up to $750,000. This will apply for contracts signed from 1 July 2017 to 30 June 2020. Eligible first-home buyers of new homes in metropolitan Melbourne will continue to receive the $10,000 FHOG.

The Victorian Government has announced that the off-the-plan concession is being retargeted and will now only apply to buyers who occupy the property as their principal place of residence (PPR). Essentially, the off-the-plan concession will only be relevant to determining "dutiable value" for the purpose of the PPR duty concession, the new first-home buyer duty exemption or the new first-home buyer duty phase-in concession. This change will apply for contracts entered into from 1 July 2017.

The Victorian Government has also announced it intends to introduce a vacant residential property tax (VRPT)

Let us know if you need further information.

Finally after some much needed discussions and bargaining the Federal Government it seems has been able to get most of its small business tax cuts through parliament with the commencement date for the increase in the company turnover threshold to $10 million from the 2016/17 financial year. What this means practically is that entities which have previously failed the turnover test can now make use of accelerated depreciation pooling and the $20,000 instant write off for assets purchased pre 30 June 2017. Plus companies also get the added benefit of reducing the small business company tax rate from 28.5% to 27.5% for this current year.

The 2017/18 year will see the company turnover threshold to $25 million and then for the 18/19 year to $50 million.

One downside of these rules is that we are now playing with 3 turnover thresholds for small business entities depending on the structure and the tax situation instead of 1. So much for tax simplification!

Let us know if you need further information.

www.gbea.com.au

Enter the Powercor Geelong Business Excellence Awards and make 2017 your time to shine!

This year two new categories have been introduced - Business Leader of the Year & Young Entrepreneur of the Year. Go to www.gbea.com.au for more information.